Tech’s IPO skepticism spreads to France


Musical notes can be seen on the sheet music in this illustrative photo on April 4, 2018.

Skepticism about IPOs of high-growth companies has crossed the Channel. Shares of Believe (BLV.PA) fell 13% Thursday morning after the French digital music company raised € 300m to fund acquisitions, 40% less than it was initially seeking. Believe, which distributes and markets niche artists as well as famous Gallic rapper Jul, had also listed its IPO in the lower end of the stated range.

Bad reviews are another splash in the eye of business advisers, following the disappointing debuts of London-listed Alphawave IP (AWE.L) and Deliveroo (ROO.L). French online auto parts distributor PHE suspended its IPO last week citing unfavorable markets. Still, investors need to believe in Believe: After Thursday’s drop, the company’s enterprise value is around 1.35 billion euros. That’s a big 142 times the estimated EBITDA for 2021, assuming it achieves 20% annual revenue growth. This multiple should decrease over time if it can continue to increase sales. But shareholders’ doubts may persist. (By Christophe Thompson)

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